Department of Legislative Services
Maryland General Assembly
House Bill 243 (Delegate Hubbard, et al.)
Program for Targeted Incentive Grants for Family Supported Early Childhood
Education - Establishment
This bill establishes the Program for Targeted Incentive Grants for Family Supported Early
Childhood Education. The Office for Children, Youth, and Families (OCYF) is to monitor
and supervise the program, which is for “low income families” with children from birth to
age six. Local management boards (the local portion of the interagency service delivery
system for children) are to evaluate proposals for program grants and recommend the most
effective ones to OCYF, which will make the selections. Grant programs are to include a
“home visiting arrangement” and the development of language and reading skills and
promote long-term family involvement in a child’s education. The bill prohibits program
grants from supplanting existing funding for compensatory education programs and requires
the Governor to include at least $6 million in the budget for the program. OCYF is to report
to the Governor and the General Assembly by January 1 of each year on the grant programs
and by January 1, 2002 on program evaluation.
The bill takes effect July 1, 1998.
State Effect: General fund expenditures increase by at least $6.0 million in FY 1999, of
which $35,400 is administrative expenses and the balance is grant awards. Future year
expenditures increase with inflation. Revenues would not be affected.
(in millions) FY 1999 FY 2000 FY 2001 FY 2002 FY 2003
GF Revenues $0.0 $0.0 $0.0 $0.0 $0.0
GF Expenditures 6.0 6.1 6.2 6.2 6.3
Net Effect ($6.0) ($6.1) ($6.2) ($6.2) ($6.3)
Note: ( ) - decrease; GF - general funds; FF - federal funds; SF - special funds
Local Effect: Local government revenues could increase by a significant amount. Any
additional workload could be handled with existing budgeted resources.
Small Business Effect: Potential meaningful.
The bill requires the Governor to include at least $6 million in the budget for the Program
for Targeted Incentive Grants for Family Supported Early Childhood Education. It is
assumed that these funds would be placed either in the OCYF budget or in the Subcabinet for
Children, Youth, and Families interagency fund. Therefore, general fund expenditures could
increase by at least $6.0 million in fiscal 1999, which reflects the bill’s July 1, 1998 effective
date. Future year expenditures reflect 1% annual inflationary increases.
The bill could result in lower future year educational costs to the extent that fewer remedial
and special education services are needed for the children who participate in the Program for
Targeted Incentive Grants for Family Supported Early Childhood Education. Any such
impact cannot be reliably estimated at this time.
General fund expenditures in OCYF could increase by an estimated $35,400 in fiscal 1999,
which accounts for a 90-day start-up delay. This estimate reflects the cost of hiring one
Fiscal Specialist to manage the process of sending out requests for proposals, reviewing the
proposals, and managing the awarded grants. It includes salaries, fringe benefits, one-time
start-up costs, and ongoing operating expenses. Future year expenditures reflect (1) full
salaries with 3.5% annual increases and 3% employee turnover; and (2) 1% annual increases
in ongoing operating expenses.
Local Revenues: Applicants for the program are defined as a local government agency,
local management board, school, nonprofit organization, or other qualified party. Local
revenues could increase to the extent that a jurisdiction’s proposal is selected to participate
in the program.
Local Expenditures: It is assumed that local management boards could handle any
additional workload resulting from evaluating program proposals with existing budgeted
HB 243 / Page 2
resources. Monies from the Subcabinet for Children, Youth, and Families fund are
distributed to local management boards to address the service needs of children at risk. Local
management boards use these funds to coordinate direct child services at the local level
between education, social services, juvenile services, and mental hygiene service agencies.
The proposed fiscal 1999 budget for the subcabinet fund includes $55.8 million for local
Small Business Effect: Applicants for the program are defined as a local government
agency, local management board, school, nonprofit organization, or other qualified party.
Small business early childhood education organizations could be favorably affected to the
extent that the proposals of non-governmental organizations are selected to participate in the
Additional Comments: There were an estimated 182,000 children from birth to age six in
Maryland in 1997 who were in families with income at or below 185% of the federal poverty
The following programs in the Maryland State Department of Education (MSDE), the
Department of Human Resources (DHR), or the subcabinet fund provide funds for preschool
services. The bill is silent as to whether the Program for Targeted Incentive Grants for
Family Supported Early Childhood Education is a stand-alone program or whether program
funds could be used to expand existing preschool service programs that incorporate the same
criteria, i.e., serve low-income families with children from birth to age six and provide a
home visiting arrangement.
The Infants and Toddlers program coordinates prevention and early intervention services for
special needs children and issues formula-based grants to local agencies that administer the
program statewide. It was transferred by Chapters 385 and 386 of 1997 from OCYF to
MSDE. The program served 6,000 children (from birth to age three) and families in fiscal
1997. Its proposed fiscal 1999 budget totals $6.2 million ($5.8 million federal funds and
$0.4 million general funds). There is also $121,000 (of which $100,000 is federal funds and
$21,000 is general funds) for the Head Start program.
The Extended Elementary Education Program (MSDE) supports public school
prekindergarten for four-year old children who live in low-income areas. The fiscal 1999
budget includes $19.3 million in general funds for an estimated 273 sites and 10,700
The Home Instruction Program for Preschool Youngsters (HIPPY) is a home-based early
intervention program that helps parents provide education enrichments for their preschool
children and stresses the role that parents play in their children’s early education. DHR is
HB 243 / Page 3
required by the Welfare Innovation Act of 1996 to develop a HIPPY pilot program for a
period of three years. DHR’s proposed fiscal 1999 budget includes $30,000 for the third year
for the Wicomico County pilot site.
MSDE’s compensatory aid formula does not serve preschool children. It distributes aid to
local school boards based on the number of students from economically disadvantaged
environments. The primary factor in the formula is the number of children ages 5-17 living
in poverty. The proposed fiscal 1999 budget includes $101.7 million in general funds for
compensatory education grants that serve an estimated 40,000 children.
Information Source(s): Office of Children, Youth, and Families; Department of
Legislative Services; Maryland State Department of Education; U.S. Bureau of the
Census/Office of Planning Estimates of the Population of the U.S. and States by Single
Year of Age and Sex; Department of Budget and Management; Johns Hopkins School of
Hygiene and Public Health
Fiscal Note History: First Reader - February 11, 1998
Analysis by: Sue Friedlander Direct Inquiries to:
Reviewed by: John Rixey John Rixey, Coordinating Analyst
HB 243 / Page 4